“Actually, the Asian Pacific sovereign bond market is larger than the US, which is something that surprises a lot of people. The corporate bond market is about 30% of the size of the US. The market and GDP is growing more rapidly in Asia, and the corporate bond market as a percentage of GDP has a long way to catch up,” says John Stover, Portfolio Manager of Tribeca Asia Credit Strategy.
The Asian corporate credit market is valued at $US1.8tr, while the broader Asian credit universe stands at $US34tr. To put this in perspective, the Australian equity market stands at the same value as the Asian corporate credit market alone. The US bond market is valued at more than $51 trillion, according to the Bank for International Settlements but Asia is rapidly catching up.
There’s a lot to like about the Asian credit universe. It’s seen rapid growth in the past decade, benefits from great structural growth stories and includes a diverse mix of emerging and developed economies – think the likes of India on the emerging side, or Australia and Japan on the developed side.
In this episode of The Pitch with Livewire Markets, John Stover offers a deep-dive into Asian credit and how to get exposure in your portfolio. Stover explores the drivers behind the massive growth in the Asian credit universe, his preferred country exposures (Australia, India and Indonesia) and the mispricing opportunities he sees.